INCOME-TAX OFFICER, WARD-1(3), JAIPUR, NCRB, JAPUR vs. M/S GIRDHAR JEWEELERS PRIVATE LIMITED, JAIPUR

ITA 1856/JPR/2025Status: DisposedITAT Jaipur29 September 2026AY 2022-238 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal. Regarding grounds 1 and 2, the Tribunal held that the CIT(A) correctly exercised powers under Section 250(4) by calling for a remand report. The additional evidence was not admitted directly but forwarded to the AO for verification, and the AO's subsequent report confirmed the genuineness of most transactions. Therefore, admitting the evidence did not violate Rule 46A. For the remaining grounds, the Tribunal noted that the AO's remand report contained no adverse remarks and confirmed the identity, creditworthiness, and genuineness of the loan transactions with four specific lenders: M/s Anantnath Skycon Pvt. Ltd. (Rs. 4.25 crore), M/s Pitamber Commodities Futures Pvt. Ltd. (Rs. 1 crore), M/s Motisons Commodities Pvt. Ltd. (Rs. 79.40 lakh), and Shri Prashant Tibrewala (Rs. 3.09 crore). The AO was satisfied with these transactions, which were through banking channels, repaid with interest and TDS, and supported by lenders' ITRs. The Tribunal found no merit in the Revenue's remaining grounds and upheld the CIT(A)'s deletion of the addition.

What were the facts?

The assessee, M/s. Girdhar Jewellers Private Limited, engaged in jewellery and bullion, filed its return for AY 2022-23 declaring Rs. 27,92,980. The case was selected for scrutiny due to large unsecured and squared-up loans reported in the Tax Audit report. The Assessing Officer (AO) issued a show cause notice proposing to treat Rs. 9.14 crores as unexplained cash credit under Section 68 and taxed under Section 115BBE. The AO made additions of Rs. 5.25 crores for squared-up loans and Rs. 3.89 crores for fresh unsecured loans. The assessee appealed to the CIT(A), providing additional documents. The CIT(A) called for a remand report from the AO, who confirmed that all lenders were identifiable, transactions were through banking channels, and loans were repaid with interest and TDS in many cases. Based on this, the CIT(A) deleted the addition.

What were the issues?

1. Whether, on the facts and in law, the CIT(A) was justified in deleting the addition of Rs. 9,14,00,000/- made by the AO under Section 68 of the Income-tax Act, 1961, despite the assessee failing to furnish adequate explanation or evidence during assessment proceedings? 2. Whether, on the facts and in law, the CIT(A) was justified in admitting extensive additional evidence under Rule 46A of the Income-tax Rules, 1962, without recording a proper finding regarding sufficient cause for non-production before the AO? 3. Whether, on the facts and in law, the CIT(A) was justified in relying on the remand report as conclusive proof of genuineness, ignoring that the AO had not verified the financial capacity or creditworthiness of the lenders? 4. Whether, on the facts and in law, the CIT(A) failed to consider that the assessee did not establish the creditworthiness of lenders, many with meagre incomes or losses, thus lacking the financial ability to advance loans aggregating to Rs. 9.14 crore? 5. Whether, on the facts and in law, the CIT(A) ignored the fact that the assessee failed to establish the source of repayment of over Rs. 5 crore, despite declaring a low income? Assessee's Contention: The assessee supported the CIT(A)'s order, relying on the AO's remand report which found no adverse remarks on loan transactions, repayments, and interest payments with TDS. They also relied on the judgment in Smt. B. Jayalakshmi Vs. ACIT (2018) 96 taxmann.com 486. Revenue's Contention: The Revenue supported the AO's order and requested confirmation of the addition. They argued that the assessee failed to furnish adequate explanation during assessment and that the CIT(A) improperly admitted additional evidence and relied on the remand report without proper verification of lenders' financial capacity.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 143(3),Section 250(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri Rohan Sogani, CA
For Respondent: Shri Anand Swaroop, CIT, Shri Rohan Sogani, CA

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 15.10.2025 passed by Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi, arising out of assessment order passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to Asst. Year 2022-23. I.T.A No. 1856/JPR/2025 Page No 2 M/s. Girdhar Jewellers Private Limited

2.

Brief facts of the case are that the assessee is a private limited company engaged in the manufacture and trading of gold and silver jewellery and bullio

The order continues below.

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